Star Bulk Carriers Corp.

Thank you for standing by, ladies and gentlemen, and welcome to Star Bowl Carriers Conference Call on the Third Quarter 2024 Financial Results. We have with us Mr. Petros Papaz, Chief Executive Officer, Mr. Hamish Norton, President, Mr. Simo Spiro, and Mr. Christos Begleros, Co-Chief Financial Officers, Mr. Nikos Resko, Chief Operating Officer, and Mrs. Karis Spiro. Palaka Donenke, Chief Executive Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. I must advise you that this conference call is being recorded today. We will now pass the floor on to one of your speakers today, Mr. Bogaris. Please go ahead, sir.

Thank you, operator. I'm Christos Begleris, Co-Chief Financial Officer at Starbuck Carriers, and I would like to welcome you to our conference call regarding our financial results for the third quarter of 2024. Before we begin, I kindly ask you to take a moment to read the safe harbor statement on slide number two of our presentation. In today's presentation, we will go through our third quarter results, Starbucks investment proposition, actions taken to create value for our shareholders, cash evolution during the quarter, an update on the Eagle Buck integration, vessel operations, fleet update, the latest on the ESG front, and our views on industry fundamentals before opening up for questions. Let us now turn to slide number three of the presentation for a summary of our third quarter 2024 highlights. For the third quarter 2024, the company reported the following. Net income amounted to 81 million with adjusted net income of 83 million or 71 cents adjusted earnings per share. Adjusted EBITDA was 143.4 million for the quarter. For the third quarter, as per our existing dividend policy, we declared a dividend per share of 60 cents payable on or about December 18, 2024. Our total liquidity today stands strong at $433 million. Meanwhile, our total debt stands at $1.3 billion. On the top right of the page, you will see our daily figures per vessel for the quarter. Our time charter equivalent rate was $18,843 per vessel per day. Our combined daily OPEX and net cash GNA expenses per vessel per day amounted to $6,376. Therefore, our TCE less OPEX and cash GNA is $12,647. Since the ECOGOT transaction was completed on April 9th this year, until the third quarter of 2024, the synergies achieved from integration resulting to more than $9 million. Integration process is advancing smoothly across all departments. Significant potential for further savings in OPEX and drive-up costs in 2025 and the remaining of 2024. Continuing to our fleet update for the quarter, during the third quarter, we have sold four vessels. Three of these vessels, namely Start Hydros, Imperial Legal, and DIVA, are expected to be delivered during the fourth quarter to their new owners for total gross proceeds of $50 million. Please turn to slide four for a summary of Starbucks' compelling value proposition. Why Starbucks? Starbucks is the largest U.S.-listed public company and second worldwide in terms of deadweight terms, specialized in dry box shipping with the highest trading liquidity. We operate a fleet of 156 vessels across all segments with an average age of 11.9 years. We operate a fleet of 80 eco-vessels and have 98% of our fleet scrubber fitted, which provides a significant competitive advantage. Starbuck has proven to be a consolidator in the dry bulk industry. Starting in 2018 through nine mergers, we have grown our fleet by 75% in number of vessels. Furthermore, we operate a fully integrated management platform that makes us the most efficient and consistently amongst the lowest OPEX and GNA operators while maintaining the highest rideship ranking. Since 2020, we have reduced our net debt per vessel by more than 50%, having reached a level where the scrap value of our fleet comfortably covers our current net debt. Since 2021, through 15 consecutive dividend payments, we have declared quarterly dividends of over $1.33 billion. We have taken advantage of historically elevated S&P values to sell some of our older and less efficient vessels using equity proceeds to buy back our shares at prices significantly below net asset value. Since 2021, we have bought back $443 million worth of Starbucks shares. Throughout the years, we have built solid corporate governance, which is shareholder-friendly by having primarily independent board members, including financial investors and other ship owners who have merged in their fleet for shares. It is important for our investors that management incentives are aligned with shareholders. Last but not least, Starbucks is an ESG-pioneering shipping. being a leader in industry's efforts to decarbonize. There is total transparency with investors, timely and efficient compliance with environmental regulations, and commitment to social responsibility. Slide five provides an overview of the company's capital allocation policy over the last three years and the various levers we have used to strengthen the company, increase the increasing value of our shares, and return capital to our shareholders. Talbot has been growing the platform through consecutive flip buyouts by issuing shares at or above MAD. In total, since 2021, we have taken actions of $2.5 billion to create value for our shareholders. On the bottom of the page, we show our net debt evolution. Our average net debt per vessel has decreased from $12.3 million per vessel to $5.7 million per vessel, a reduction of more than 50%. As a result of this deleveraging process, our current net debt is covered by the fleet scrap value. Finally, we currently have six debt-free vessels with an aggregate market value of more than $100 million. Slide 6 graphically illustrates the changes in the company's cash balance during the third quarter. We started the quarter with $486 million in cash. We generated positive cash flow from operating activities of $138 million. After including debt proceeds and repayments, capex payments, and energy saving devices and balanced water treatment system installments, and the second quarter dividend payment, we arrived at a cash balance today of $473 million. I will now pass the floor to our Chief Operating Officer, Nikos Reskos, for an update on the EagleBulk integration and the operational performance.

Thank you, Christos. Slide 7 illustrates a summary of the EagleBulk transaction integration. The technical and commercial management of the EX Eagle fleet has been established across Starbucks offices in Athens, Singapore, and Stanford, leveraging the combined global presence. The commercial teams for the Supermax and Ultramax vessels in the three continents have completed their integration successfully, managing the second-largest Supermax and Ultramax fleet globally, operating both on voyage and time-chartered basis. Cream management is gradually taken in-house, phasing out third-party managers, while technical maintenance and marine safety quality standards, processes, and policies have been applied uniformly across the combined fleet. Procurement of stores, spare parts, bunkers, and lubricants have been centralized for the combined fleet. These measures are expected to produce significant operating cost efficiencies. On the bottom of the page, you see an illustration of the synergies from Eagle Bar to integration. Through OPEX, GNA, and interest expense, as well as savings on dry dockings, we have achieved more than $9 million in cost savings. Please turn to slide 8. we will provide an operational update. OPEX was at $5,114 for Q3 2024. Net cast G&A expenses were $1,262 per vessel per day for the same period. In addition, we continue to rank at the top amongst our listed peers in terms of rideship safety score. Slide nine. provides a fleet update and some guidance around our future dry dock and the relevant total off-high days. On the bottom of the page, we provide our expected drive-off expense schedule, which for the remaining of 2024 is estimated at $18.3 million for the dry docking of 15 vessels. In total, we expect to have approximately 420 off-high days for the same period. In 2025, we expect to dry dock 47 vessels for 1,200 of our days, and an expected cost of $53.8 million. On the top right of the page, we have our CAPEX schedule, illustrating our new building CAPEX and national energy efficiency upgrade expenses, with 100% of our fleet now being balanced water equipment fitted. Based on our latest construction schedule, our new building vessels are expected In line with EEXI and CII regulations, we will continue investing in upgrading our fleet with the latest operational technologies, aimed in improving our fuel consumption and reducing our environmental footprint, further enhancing the commercial attractiveness of the Starboard fleet. Regarding our energy-saving devices retrofit program, we have completed 41 installations, with three more remaining for retrofit by the end of 2024. We plan to retrofit another 26 vessels with ESDs within next year. The above numbers are based on current estimates around dry dock and retrofit planning, vessel employment, and yard capacity. Please turn to slide 10 for an update on our fleet sales. On vessel sales front, we continue disposing of vessels opportunistically at historically attractive levels. In 2024, we have sold 13 vessels for total gross proceeds of $233 million, reducing our average age and improving overall fleet efficiency. Following the roll-over of the Eagle Bulk existing chartering contracts, we now have a total of 10 chartering vessels. As mentioned earlier, we have five firm shipbuilding contracts with Qingdao Shipyard with a construction of five Kamsa Maxx new building vessels and delivery in Q4 and first half 2026. Considering the affordation changes in our fleet mix, we operate one of the largest drive-out fleet among U.S. and European listed tiers with 156 vessels on a fully delivered basis and an average age of 11.9 years. I will now pass the floor to our Chief Strategy Officer, Alice Pliakadonaki, for an ASG update.

Thank you, Nico. Please turn to slide 10, where we highlight our continued leadership on the ASG front. the sixth annual Starbuck ESG report has been published in accordance with the latest global reporting initiative requirements. Developed with PwC's guidance, the report has received limited assurance from EY and has been reviewed by the company's ESG committee. Among its key milestones, the report highlights the impact materiality assessment conducted with input from internal and external stakeholders and includes a comprehensive list of ESG-related key performance indicators benchmarking the company's performance against previous years. Through the implementation of technical and operational measures to improve fleet energy efficiency, the company achieved a 4 percent reduction in Scope 1 greenhouse gas emissions compared to the previous year, a 5.8 improvement in fleet-wide CII, and a 9.5 reduction in Scope 3 emissions. For the fourth consecutive year, Starbuck has successfully submitted the 2023 Carbon Disclosure Project questionnaire. This year's submission expanded to include data on water management alongside climate change reporting. Preparations are underway for the Fuel EU Maritime Regulation coming into effect in January 2025, focusing on compliance strategies such as biofuel adoption and leveraging the pooling and banking mechanisms outlined in the regulation. On the global regulations front, we actively engage with regulators and industry organizations, providing input and expertise to support the development of mid-term greenhouse gas reduction measures expected to be adopted by the IMO in 2025. We continue to enhance well-being programs for our people and strengthen our contributions to society, including the sponsoring of athletes who qualified for the Paris 2024 Olympic Games. I will now pass the floor to our CEO, Petros Papas, for a market update and his closing remarks.

Thank you, Haris. Please turn to slide 11 for a brief update of supply. During the first 10 months of 2024, a total of 29.4 million dead weight was delivered, and 2.9 million dead weight was sent to demolition for a net fleet growth of 26.5 million dead weight, or 2.6% year-to-date and 3% year-over-year. Uncertainty on future green propulsion, high sea building costs, other vessel types have helped keep new orders under control. The order book experienced a small increase and presently stands at 10.3%, while vessels above 20 and 15 years of age stand at 9.5% and 23.5% of the fleet. The average steaming speed of the dry bulk fleet has stabilized at low levels of approximately 11 knots during the last six months due to inflated bunker costs and environmental regulations, including EEXI and CII, that increasingly incentivize slow steaming. Moreover, as of 2024, an increasing moderating supply growth as a consequence. Global port congestion has fully normalized, following a strong reduction that lasted two years and gradually inflated available supply by approximately 6%. Congestion is now expected to follow seasonal trends, and the negative effect on the supply and demand balance will fade and could gradually reverse as of 2025. Moreover, rising tensions in the Red Sea since late 2023 and the rerouting away from the Suez continue to cause strong inefficiencies for trade, while crossings through the Panama Canal are expected to fully recover by the end of this year. As a result of the above trends, fleet growth is unlikely to exceed 3% per annum over the next couple of years, even under the assumption that demolition activity remains at current low levels. Let us now turn to slide 12 for a brief update of demand. According to Clarkson's, total drive-out trade during 2024 is 5.4 percent year-over-year due to record iron ore, coal, and minor bulk exports, while ton miles have received extra support from canal inefficiencies and strong long-haul Atlantic exports. Despite the weak economic performance and a struggling property sector, Chinese dry supported by strengthened infrastructure, manufacturing, and end-product exports. Imports to the rest of the world are experiencing a strong recovery over the last year, as lower commodity prices and easing monetary policy is boosting raw materials demand. During 2025, from 4.8% this year. The incoming Trump administration is expected to follow a pro-tariff policy that may create headwinds for global trade amid possible retaliation acts that will, in our view, have a moderate direct impact on dryback trade. During the last few months, the Chinese authorities have announced a string of pro-growth measures that should help improve the economic outlook. The main goals of the various stimulus packages are to provide support on property prices, to reduce the huge inventory of unsold houses, to address local government debt through the issuance of 10 trillion won special bonds, and to boost private consumption. Moreover, should the Trump administration Iron ore trade is expected to expand by 5.8% in ton miles in 2024 and 1% in 2025. During the first three quarters, Chinese steel production declined by 4.1% year over year, as the property market continued to face challenges, while strength from manufacturing and steel exports have helped provide partial support. On the other hand, steel production from the rest of the world has experienced a recovery throughout the year, and year-to-date have increased by 3.3%, driven by strong demand from India and a gradual recovery in the Atlantic region. Preference for higher-quality iron ore to meet environmental targets as new mine capacity of higher quality iron ore will come online in the Atlantic over the next years and should gradually substitute Chinese domestic production and imports of inferior quality. Coal trade is expected to expand by 5% during 2024 and contract by 2%. during the last years has inflated coal trade volumes, but growth has come primarily from short-haul Indonesian exports. Chinese coal imports presently stand at record levels and year-to-date have increased by 13.5%, as thermal electricity generation grew at a faster pace than domestic coal production during the first three quarters and stopped increased ahead of peak winter demand. Moreover, the Indian economy has expanded at a faster pace among G20 members that has led to a strong increase in energy demand and along with inland infrastructure constraints on domestic production is inflating coal import requirements. Grain trade is expected to expand by 6.6% during 2024 and by 2.4% in 2025. During the first three quarters, grain trade increased by 3.5%, but during the third quarter, it declined by 0.5%, driven by a correction of Brazilian corn exports, weak Black Sea volumes, and better-than-expected Chinese production. U.S. grain sales have experienced a strong increase and is expected to inflate grain volumes during Q4, while an increase of grain production worldwide should continue to put pressure on grain prices and support grain trade in the medium term. Mineral bark trade has the highest correlation to global GDP growth and is expected to expand by 4.4% during 2024 and 2.6% in 2025. The positive regional steel price arbitrage and the potential rush to build up inventory oil trades, while bauxite exports out of West Africa continue to expand at a strong pace that generates ton miles for the capeside sector. As a final comment, we expect a relative Q1 market slowdown, but remain optimistic about the medium-term prospects of the dry bulk market, given the favorable supply picture, stricter environmental regulations, and recent steps by the Chinese government

Thank you. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. Our first question is from . with Jefferies. Please proceed.

Thank you. Thanks, operator. Hey, guys. Good afternoon. I have a A couple of questions. Maybe just first off on the synergies you're realizing following the merger with Eagle. You've got $9 million so far through the third quarter. Can you talk a little bit about where you think this starts to evolve from here? I know the initial target has been or maybe the existing target continues to be $50 million achievable within 12 to 18 months. Do you feel that you're on pace for that? Does it happen sooner? Is there any more that can be extracted, do you think?

Thank you, Omar. This is Nikos. Focusing on Q3, where you see the 6.5 million of synergies just for the quarter, gives a pretty good idea of what should be falling on the consecutive quarters and throughout 2025. Expectation is that this threshold per quarter should improve, especially as we kick in with efficiencies on crew changes, which has been an expensive exercise we need to correct, and So I think we're on target, and hopefully we'll be reporting better numbers as well on Q4.

And just to add, you know, the synergies are at 26 million annual run rate already. And, you know, we've got sort of four quarters before, you know, we expected to hit the final run rate. So I think we'll be there, and we'll probably beat it.

Okay, thanks, Hamish. And just to make sure I hear correctly, probably like the synergies that are to be realized from here in a sort of a bigger ratio or bigger amount are on the operating costs, like the vessel op-ex and on the dry dockings?

Well, when the dry dockings is, yeah. The 26 million run rate is only OPEX and GNA. On top of this, you should add the dry docs that Nikos made reference during his presentation. We did not have any dry docs on the Eagleback fleet during the third quarter. So the figure that you see there of 6.5 million includes only OPEX, GNA, and indirect expense savings for this specific quarter.

Ah, okay. I see. Thank you. And then I guess, you know, I guess it's still early days. It's just one quarter officially post-merger. What do you think, and this is a modeling question, but what should we be modeling for GNA on, say, an ongoing basis?

So, Omar, this is Simos. The figure that we have... Actually, the split that we have for the third quarter for the Eagle Bulk, ex-Eagle Bulk office, GNA, is 13.700 per day per vessel. So we have managed to bring it significantly lower than the figure that EGLE had during the last quarter of operation. We expect that as we move ahead, we will be in a position to further reduce the office expenses and headcount expenses of Stanford and Singapore. and bring it closer to the figure that Athens, the Athens office had up to last quarter.

Great. Thanks, Demos. And just a final one on my end of more market color. And, Petros, you discussed this a little bit, but just wanted to get maybe a bit more flavor or feel for how you've been seeing this market develop recently. Clearly, capes have been the outperformer really all year. And even recently, even though there's been some volatility, capes have definitely been firmer. But the sub-capes seem to be a bit stuck. and just wanted to see if you could maybe give a sense of, you know, what's driving that divergence.

Hi, Omar. Yeah. Actually, the capes have been doing okay for the quarter. They haven't been doing that great because the average for Q4 has been 20,800. And it was last week and a couple of days ago, actually last week, that it did extremely well. But the average has been 20,800. It's not that. And also, it's not just the smaller sizes. The Supra Max average has been about 14,500. So it is actually, the problem is actually with the Panamaxes. It's a bit surprising because if you look at the Panamax, at the quantities that have been carried during 2024, they have been 9.3% in tons higher than the equivalent last year. So actually I was wondering, and I had a discussion with our analysis department, and the reasons of the fall on the Panamax's are as follows. First of all, the supply is 3.4 percent, which is on the relatively high side, 3.4 percent already. Then a big problem has been the reduction of congestion. On the Panamax side, most of the reduction in congestion has been on those vessels. Then a third problem has been the fact that 42 percent of the additional tons this year have been Indonesian coal to China. And this is, as you know, this is a very short distance. Thereafter, Brazil decreased their corn exports by 7 million tons compared to last year, and that's long distance. Although Argentina actually increased theirs, they do a lot of that on supra-vessels, where Brazil exports mostly on Panamaxes. Therefore, the decrease affected the Panamaxes. Then, of course, the opening up of the Panama Canal didn't help a lot. Russia exported less grains from the Black Sea, and there was a number of Panamax tonnage released. from the reduction in the Chinese coastal trade. So all that actually conspired in reducing actual demand in ton miles for the Panamax sector.

Got it. Petros, thank you. Very clear and very helpful. Thanks, guys. That's it. Thank you, Omar.

Our next question is from Ben Nolan with Stifo. Please proceed.

I appreciate it. Thank you. And, by the way, that was a very comprehensive answer. So I appreciate that. It was helpful to me. I did have a couple questions, though. First, sort of following up with the market trends and so forth, I was curious if you have, and appreciating that you talked a little bit about sort of the impact of the election and change in administration in the United States, but have you seen any change in customer activity yet? Is there any sort of front-running of potential tariffs or anything of that sort? And maybe is that something you would expect or probably not?

Well, actually, hi, Ben. Actually, we have not seen much yet, but we do expect to see some short-term boost in trade because of what people are afraid is coming. And we have a view about what the Trump effect is going to be. If you want, I can talk about that. Sure. Okay, so U.S. trade, U.S. bulk trade actually is not huge. U.S. trade is about 5% on exports and 2% on imports. So there is going to be a relatively small direct effect. But... What is going to be the actual effect? Let's take tariffs to begin with. So if there are big tariffs on China, what will happen is that China will import less from the U.S. and will import more from South America. So that is going to create longer distances and will probably, more important, will create more congestion because the South American ports are perhaps less efficient than the U.S. ports, and also there's going to be more demand from the same ports. So I think that I would consider that that would be a positive effect. Also, such tariffs, I believe, will stimulate China to boost their economy. and I think as a countermeasure. So I think that may also become a positive result of such tariffs. A third point of tariffs would be that, a negative point, would be that it is possible probable that it will create, will have a negative effect on the world economy. We cannot evaluate that right now, but we believe there's going to be less trade overall at the end of the day. Specifically, we believe that tariffs will influence container ships more than anything else because there's more such trade to the U.S. from China. And if that happens and there's a reduction in trade on the container ships, that will then affect Supramax vessels because when container ships are doing very well, there's a cannibalization of commodities from container ships to Supramax vessels. Now, another effect of the Trump policies could be that the Ukraine war stops. And that had created inefficiencies up to now. But we think here that Europe will not give up their sanctions right away. So that will probably continue. And hopefully there's going to be reconstruction in Ukraine. which would be a very positive thing because that would create also major congestion. And we think there's going to be more exports both from Russia and Ukraine from the Black Sea. So we consider that as a positive as well. Now, what could be a big negative? would be the fact that you saw, I think, or at least I saw, that Iran is kind of retracting on their nuclear plans as far as creating nuclear weapons is concerned. And I think that this probably has to do with a certain fear of what... Mr. Trump might do. But a side effect of that could be that the Iranians might stop supporting the Houthis. And if that happens, it's a potential that the Red Sea will open. And if the Red Sea opens, that is not going to be positive for shipping. We all know that a big percentage of vessels actually go through... the CAPE good hope and, therefore, ton miles increase. And a final point. I think that Trump administration would probably affect the dollar, would probably strengthen the dollar, which is not good for commodity trade, and might reduce oil prices, which is not good for vessel speeds. Overall, there are positives and negatives. We actually see more positives in it, except if it leads to an opening up of the Red Sea. That could actually balance towards a negative.

Yeah, that was a lot more than I was counting on. Very helpful. I appreciate it. I knew you would answer the question, so I was prepared. Yeah, you always are. So changing gears, just for my second question, you guys have been implementing and spending money on the energy-saving devices. I'm curious, now that you've had them or purchased, There's quite a number of them that are in the fleet and you've been using them. Have you done any post-mortem at all in terms of figuring out what your actual return on the investment has been and what your excess cash flow is relative to vessels that don't have that equipment?

We are trying to figure out what is the answer to the question before we install them. So it's pretty much doing a module testing before we install anything. And importantly, we do seed trials on every ship that is fitted. So we have actual numbers that we count on, and we make our forecast on that basis. The short answer is the repayment period is anything between two to three years, depending on the measure, which ranges from tax all the way to change in propellants. And the efficiency we get as tested is anything between 6% to 10%, depending on the combination of technologies you use.

Okay. And there haven't been any variance relative to sort of what you modeled and tested? It's come in as expected?

It is coming as expected because we did not install anything unless we run the calculations, the mathematical calculations behind it. The effect beyond, of course, getting better consumptions and burning less fuel, so we know that the repayment is quite specific, is that the CII rating of the vessel improves once you fit the devices. So we follow a very careful approach of when and what to install. Some ships we will just leave out, but vessels that require an upgrade remain competitive until we have a much more clear picture of the CII rating reduction rate post-2026 or fuels or retrofits, we prefer to keep everything upgraded to remain competitive. And it seems to be working. That's why you see us continuing the plan. Got it. Okay. Very helpful. I appreciate it. Thank you. Thank you, Ruben.

Our next question is from Chris Robertson with Deutsche Bank. Please proceed.

Hey, good afternoon, everyone, and a shout-out to Omar and Ben for taking most of the good questions there. I wanted to follow up, though, on Ben's questions related to the energy-saving devices, but I noticed you mentioned in the slide here around the use of biofuels I'm wondering if you could speak specifically on that, if that's biodiesel, if that's for use in the secondary tanks and in certain areas, I guess, just in Europe, kind of the economics around biofuel and the availability in terms of where you could pick that up as a bunker.

Hi Chris, this is Haris. So while we are looking into biofuels within the scope of fuel EU maritime regulation which basically requires that we reduce the carbon intensity of the fuel that we burn. And it is, there is a pooling mechanism in this regulation which basically enables us to use biofuels on a few vessels and this way generate credit for the remaining of the vessels which trade in and out of Europe. This regulation is relevant only for our trade in and out of European ports. Now, we are currently in discussions with banker suppliers. At the moment, the biofuel we're looking into is B30, which is the most available and the most tested to burn in our engine rooms. There is availability for the quantities that we expect we will need in order to comply with the regulation. for 2025. Now, what may change the landscape here is the global regulations that are expected to be decided within 2025 to come into effect in 2027, which at that point in time will affect the entire globe. So once we see relevant measures at the global level, so for us this means that we will have to reduce carbon intensity of the fuel we burn in our global trade, this will require additional quantities of biofuels. So this is the challenge. The challenge will be from 2027 onward. For 2025, we do not expect to have difficulty in sourcing the biofuels that we need to comply with the regulations.

Okay, that's helpful. And just as a follow-up to that, I guess, as it relates to your fleet, but potentially the broader fleet, are there any tweaks or upgrades to your engines or just engines in general across the fleet that would need to be done in order to burn the biofuel?

No, no. Biofuels are already tested, and we can burn them in our engine rooms without any further modification.

Yeah, the B30 is basically 70% fuel oil, right, and 30% biodiesel, and that makes work.

Hamish, is there any additional maintenance required in burning that type of fuel? Does it create any issues down the road where it would increase costs anywhere?

Well, you have to use the right lubricating oil, and Nikos may be more familiar with that than I am. But I think that is, I think basically as long as you burn it relatively quickly after you buy it, it works well. I think it can go bad if you leave it a long time.

This is Nikos. Hem is correct. It's a lifetime of the fewer watts we keep it on board. However, as this is intended for the European trade, as Haris mentioned, we've done our work in terms of the frequency of calls in Europe, and we have a pretty good idea of what points we will require to comply with surely Europe, especially after the Eagle merger, where we have a lot more supers, and these are the shifts that are calling heavily into Europe. But we don't expect any difference on operating expense, maintenance, or Any sort of damages to be done with fuels, it's pretty safe to use, and we've tested it, so we're good.

And, Chris, just a follow-up for your modeling purposes. These are costs that, through our charter parties, we are able to pass on to our charterers, so this wouldn't be extra costs for Starbucks.

That's good to hear. Okay, yeah, I appreciate the answers. Thank you very much.

Our next question is from Bendic Fulton Neteus with Clarkson Securities. Please proceed.

Thank you. So at least on our numbers, the global market seems to be pricing in quite a discount to second-hand values, your stock included. So I would love to hear your thoughts on the current situation in the S&P market.

Yes. Well, you know, prices react to chartering rates. Therefore, on the smaller vessels, we'll probably see a downside for as long as they're not doing as well, especially on Panamax. as well, probably, because they follow Panamaxes to a degree. On the capes, the picture is much better in the sense that the older poopies And then there's expectation that there's going to be longer routes to trade going forward, more iron ore from Brazil and more bauxite from West Africa, and later on more iron ore from West Africa, and therefore more ton miles. So I think that on the capes the pricing will be more resilient. And let's not forget that there's not too much availability for new buildings, so people will necessarily turn to second-hand, and that will probably underpin prices to a degree. So overall, bigger vessels, not a huge issue. Probably more of a problem with Panamax for as long as they're weak.

And my guess is? slight follow up on that one you did mention the softness in Panamax relative to the other segments do you see that as more of a structural thing or do you expect it to be temporary

Yeah, well, what do Panamaxes carry? Panamaxes carry grains and coal. So it will depend on what happens with these two cargoes. We think that on the grain side there's going to be more trade going forward. On the coal side... In the long term, it's going to be less coal trade, but I think that in the shorter term, especially with the Trump transition, that might not happen. And of course, as we said, because of... Because of the need to use higher quality ingredients in steelmaking, which is iron ore and coal, and those are mostly situated in the Atlantic, we think that long haul will remain. So long haul is more important than steel. than tons themselves. So I think that it will revert to a better market going forward. Of course, let's not forget that the Panamax order book is the highest at around, I think, 14.1%. And that is not going to help a lot. So overall... On the trade side, we are positive for the medium-longer term on the Panamaxes, but as I said before, we're more positive on the capes and the supras, depending on what happens with the Red Sea and with container ships.

Thank you.

Thank you.

Our next question is from Clement Mullins with Value Investor's Edge. Please proceed.

Hi, good afternoon. Thank you for taking my questions. Most has already been covered, but I wanted to ask a bit about your fleet strategy going forward. You now have 10 vessels time-chartered in under long-term agreements. Could you talk a bit about how you think on the tradeoff between time-chartering versus buy-in when you think about renewing the fleet, especially considering the somewhat elevated asset values you were talking about before on the mid-size segment.

Can you repeat that? Time charter versus what? Time charter, I think, is purchasing. Yeah, purchasing vessels. I think I'll let Petros take care of the size differences and so on, but I think one thing to be clear about is that with our share trading below net liquidation value of hard assets, we're not intending to buy big fleets of vessels for cash. or to place, you know, large new building orders for cash. Um, you know, we, we understand that with, with the share trading, you know, basically below the net liquidation value that shareholders are looking for us, you know, if we're going to make an investment in ships, it should be basically buying our shares. Um, you know, uh, So, you know, that's for the near term. You know, I think for the longer term, obviously, we'll have to renew the fleet. And Petros, maybe you want to talk to that subject.

Yeah, yeah. on purchasing of vessels, as Hamish said exactly, on chartering in vessels, it will depend on pricing. I mean, the vessels that we have chartered in, actually we did them in extremely good levels for us. After that, when the market improved, They went up much further. They were up like $2,000 or $3,000 per day and therefore we stopped chartering in. If the market slows down and ideas fall to previous levels, then we will do more of that. We have a very good relationship with Japanese owners and I'm sure that they appreciate the strength of our company and and the good cooperation that we always had on chartering bills, and I think that we'll do more of them, but at prices that make sense, at charter levels. That's very helpful.

Thank you. That's very helpful. Thank you. Thank you for taking my questions, and congratulations for the quarter. Thanks a lot.

Thank you, Chairman. We have reached the end of our question and answer session. I would like to turn the conference back over to management for closing remarks.

No further remarks, Operator. Thank you very much.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation. Thank you. Bye-bye.